Standing Committee A

[Mr. Eric Illsley in the Chair]

Industrial Development (Financial Assistance) Bill

Resolved, 
That, during proceedings on the Industrial Development (Financial Assistance) Bill, the Committee do meet on Tuesdays and Thursdays at five minutes to Nine o'clock and at half-past Two o'clock.—[Alan Johnson.]

Eric Illsley: I remind members of the Committee that there is a money resolution in connection with the Bill. Copies of the resolution are available in the Room. I also remind hon. Members that adequate notice should be given of amendments. As a general rule, I do not intend to call starred amendments, including those that may be reached during this sitting and any subsequent one. Hon. Members are also reminded to switch off their mobile telephones and to set pagers to quiet mode.Clause 1 Increase in limit on selective financial assistance

Clause 1 - Increase in limit on selective financial assistance

Henry Bellingham: I beg to move amendment No. 1, in
clause 1, page 1, line 4, leave out '£3,700 million' and insert '£3,000 million'.

Eric Illsley: With this it will be convenient to discuss amendment No. 2, in
clause 1, page 1, line 7, leave out '£600 million' and insert '£200 million'.

Henry Bellingham: It is a pleasure to serve under your chairmanship, Mr. Illsley.
 I offer the apologies of my hon. Friend the Member for Sevenoaks (Mr. Fallon), who cannot be here today. He is a member of the Select Committee on the Treasury and is currently in eastern Europe. He spoke at length on Second Reading, and is quite an expert on the subject of the Bill. I added my name to his amendments and new clauses because it is important that they are discussed in Committee and that the Minister gives the Committee the benefit of his views. 
 The first two amendments are probing amendments. My hon. Friend the Member for Sevenoaks and I are keen to establish whether it is vital that the sums in question are raised by the amounts set out in the Bill and explained by the Minister on Second Reading. He talked about Her Majesty's Government and the Department of Trade and Industry needing a well to dip into to support the different schemes. He pointed out that the new limits were chosen by a 20-year roll forward of the existing limit of £2.7 billion in real terms using a 2.5 per cent. GDP deflator. He said that the limits are based on current spending, and that the new ceiling will last for six years, assuming that the rate remains constant. On that basis, the Minister and his officials plumped for the new base figure of £3.7 billion. 
 That is a very large increase, but the very large increases in the four tranches concern us even more: they are to increase from £200 million to £600 million. When we discussed that on Second Reading, my hon. Friend the Member for Sevenoaks, in an extremely well prepared and comprehensive speech, made a strong argument about why those figures were over-optimistic and excessive in any circumstances. 
 As I said, the amendments are probing. They can be discussed again on Report and in another place, but I should like the Minister to comment on my point about the 20-year roll forward and the 2.5 per cent. GDP deflator.

Alan Johnson: I urge the Committee to reject the amendments, although I appreciate that they are probing amendments, as the hon. Member for North-West Norfolk (Mr. Bellingham) said. We want to strike a balance between retaining the concept of parliamentary control and bringing the limits in the Industrial Development Act 1982 up to date to take account of the growth in the economy since 1982 without making the process too burdensome for Parliament. The limits proposed in the Bill reflect that objective.
 Let us consider the background to the proposal. The Industry Act 1972 had a limit of £150 million and four further tranches of £100 million; in 1976 the limit was increased to £600 million and four further tranches of £250 million; and in 1982 there was an increase in the limit from £600 million to £1.9 billion—more than treble the limit under the previous Government—plus four further tranches of £200 million. We propose to increase the limit to £3.7 billion, which the amendment would reduce to £3 billion. That would increase the limit by only £300 million the £2.7 billion limit that was provided for 20 years ago, which has been reached. That is the same increase as was introduced 20 years ago, when the 1982 Act raised the limit allowed under the Industry (Amendment) Act 1976 when it reached its capacity of £1.6 billion and increased it by a further £300 million. I presume that that is the logic of the amendment tabled by the hon. Member for Sevenoaks. 
 The hon. Member for North-West Norfolk asked me to repeat my explanation. The Treasury rolled the limit forward by 20 years using the GDP deflator of 2.5 per cent., which produced a new ceiling of £4.5 billion. We felt that it would be too long before the matter had to be considered by Parliament, so the limit was reduced to the proposed £3.7 billion, with further tranches of £600 million. That is the logic behind the proposal. 
 We left in place the part of the Act that provides for parliamentary approval to be needed if it is proposed to spend more than £10 million. Although the £10 million limit was introduced in 1982, we have not sought to increase it because it is important that Parliament scrutinises projects that exceed that amount. 
 We have been consistent in saying that there should be four further tranches and that those will be considered by Parliament. There was an argument 
 for our coming back to Parliament only twice or three times, which recognised that the issues are not hugely controversial and that Parliament has spent little time on them—broadly, it has been satisfied with the way in which the scheme has run. However, we have left the position as it is: we will need to come back to Parliament four more times before the limit is reached. 
 Amendment No. 2 proposes that the tranches remain at £200 million, but prices have more than doubled—by a factor of 2.2, to be precise—since 1982. The amendment would require the first affirmative order to be made in less than two and a half years' time; the three subsequent orders would be needed every 12 to 15 months after that. That is based on taking the average of the forecast spend for the current financial year and for the following three years, and the assumption that the rate of spend of £185 million per year remains constant in subsequent years. That is not a proper use of Parliament's valuable time. New primary legislation would be needed in six years' time. 
 Section 8(8) of the 1982 Act already provides Parliament with the opportunity to scrutinise the larger uses of section 8—exceeding £10 million—and we have no plans to change that threshold. This is a sensible measure that accords with what previous Governments have done to bring this part of the Act up to date and into line with today's prices. I ask the Committee to reject the amendments.

Henry Bellingham: I am grateful to the Minister, who went over ground that we had covered before and explained logically why the additional amounts are needed. I hope he does not feel that I am being churlish in pushing these issues. It is important that we know exactly why the larger figures have been chosen. In the spirit of co-operation that has prevailed so far, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Henry Bellingham: I beg to move amendment No. 3, in
clause 1, page 1, line 7, at end add— 
 '(5A) Before any order is laid under subsection 5 above, the Secretary of State shall make a report to Parliament on how the financial assistance provided under the previous limit has satisfied the criteria set out in paragraphs (a), (b) and (c) of subsection (1) of this section.'.

Eric Illsley: With this it will be convenient to discuss the following:
 New clause 1—Annual Report— 
'.—The Secretary of State shall make an Annual Report to Parliament on the use of the financial assistance limited by the provisions of section 1.'.
 New clause 2—Commencement— 
'Section 1 of this Act shall not come into effect until the Secretary of State has made a report to Parliament on the efficacy of each of the schemes supported under section 8 of the Industrial Development Act 1982 since the limit laid down in section 8(5) of that Act was first increased by order.'.
 New clause 3—Commencement (No. 2)— 
'.—Section 1 of this Act shall not come into effect until the Secretary of State has made a report to Parliament on— 
 (a) the efficacy of each of the schemes supported under section 8 of the Industrial Development Act 1982 since the limit laid down in section 8(5) of that Act was first increased by order; and 
 (b) the future administration of the business support schemes financed by section 8 of the Industrial Development Act 1982.'.
 New clause 4—Commencement and continuance in force— 
'(1) The provisions of this Act other than this section shall come into force in accordance with provision made by the Secretary of State by order. 
 (2) This Act shall (subject to subsection (3)) cease to have effect at the end of the period of two years beginning with the day on which it is brought into force. 
 (3) The Secretary of State may by order provide that the provisions of this Act shall continue in force for a further specified period not exceeding two years. 
 (4) Orders under this section shall be made by statutory instrument. 
 (5) No order under this section shall be made unless a draft has been laid before and approved by resolution of each House of Parliament.'.

Henry Bellingham: This will be our most important debate because it deals with the level of accountability that is built into the system that is to be established. Amendment No. 3 speaks for itself. It is about making a report to Parliament. The report that came out last June was the annual report on the section 8 schemes under the 1982 Act. When I asked the Minister whether it could have been published a bit earlier, he pointed out that there was a built-in constraint: various data needed to be collected at the end of the financial year, so the report could not be brought forward to any significant extent. However, from the point of view of keeping the House informed, would it make sense to make the report available within three or four weeks of the end of the financial year? It is quite a long wait until June or thereabouts.
 The Minister wrote to members of the Committee on 10 March giving an update on current section 8 schemes. It was a good letter containing a fairly comprehensive amount of information. I am particularly grateful for the update on the small firms loan guarantee scheme—we did not have such detailed information to hand on Second Reading. 
 Does the Minister agree that it would be sensible to bring forward that important report? Would it not be sensible to amend the Bill so that there is a specific obligation to do that? I realise that the Bill is essentially about updating the ceiling and the tranches, and the Minister may say that there is no need to have anything in it about the annual report. However, in the light of the concern that Parliament has expressed, it would make sense to accept the amendment. 
 New clause 1, which was drafted by my hon. Friend the Member for Sevenoaks, also deals with the annual report. In a way, he is double dipping: he took the view that if the amendment did not work, a new clause specifically on the annual report would make sense. He also drafted new clauses 2 and 3. To some extent they are overtaken by new clause 4, which I drafted with the expert help of the Committee Clerk, to whom I am grateful. 
 New clause 4 would mean that, similar to the provisions of the prevention of terrorism Acts, the Government will have to come to Parliament for a 
 commencement order every two years. That would give the House the opportunity to ask the Government to say what had happened under the Bill and to justify their need to continue spending such substantial sums. In other words, the clause will move the onus on to the Government. 
 At the moment, the Government come to the House to explain what they have done and a short debate takes places in Committee. In fact, the debates have been lasting for longer. As I pointed out on Second Reading, the first debate took place in 1996 on the first tranche under the Industrial Development Act 1982. That debate lasted 14 minutes, as the then Opposition did not provide much scrutiny—obviously, they thoroughly approved of what the Government were doing. However, the debates on the next three tranches lasted roughly half an hour each. The current regime involves the Government explaining what they have done in statutory instrument Committees, whereas the new clause would ensure that these matters come before the whole House, as happens under the prevention of terrorism Acts, for a proper debate. That would be a much neater way of working, as the Government would explain what is happening. 
 Accountability is important, and the Committee will understand why we are concerned about it. On Second Reading, I pointed out that the Minister said that, based on current spending and assuming the rate remains constant, the new ceiling of £3.7 billion will last for six years before the first order is needed, with increases roughly every four years after that. We had a debate only the other day on the fourth tranche under the old ceiling, but the next debate would be six years from now; a lot can happen in six years. The Minister rightly pointed out that if the Government want to establish the urban post office reinvention programme or a coal scheme, they have to come to the House, because such schemes would breach the £10 million limit. A lot of money is available to spend and many Opposition Members' constituencies will benefit from some of the industry-specific schemes, but six years is a long time. 
 I examined the Department of Trade and Industry briefing note before coming in this morning. I was interested to note that the DTI believes that the new regime will lead to more parliamentary scrutiny. I do not understand that. The Department bases that conclusion on the premise that it was 14 years before the first order after the 1982 Act was needed in 1996, but the 1982 Act was a new initiative to set a brand new ceiling of £1.9 billion. The Conservative Government would have had to spend at an unbelievably furious rate to have reached the ceiling before 1996.

Mark Field: That exposes the fallacy of the 14-year period that has been put about both on Second Reading and in this Committee. A new threshold leads to a long period before another debate; the relevant point is how quickly the Government must come to the House for each additional tranche. Our concern is
 that that rate will accelerate, and with that in mind, the comparison with the 14-year period is not valid.

Henry Bellingham: I am grateful to my hon. Friend for pointing that out. He anticipates my elaborating on that point. The then Minister, Phillip Oppenheim, came to the House in 1996 to ask for the first £200 million tranche; subsequent tranches came hard on the heels of each other. There was one in 2000 and another in 2002, and we dealt with the fourth tranche only the other day. The key point is that since the first ceiling was reached, Parliament has had the chance to scrutinise the 1982 Act and the relevant section 8 schemes every 20 months or so. That is a substantial amount of scrutiny, which compares favourably with the four and a half years or 54 months anticipated under the new regime set out in the Bill.
 Of course we trust the Minister, but we do not know who will take over from him. He may well be in the Cabinet in a few years, and the person who takes over from him could be a bit looser with our money. A great deal of money could be spent in six years without much scrutiny taking place. 
 That is why the neatest way forward is for the Minister to consider carefully accepting new clause 4. I simply do not see a downside for him. He would have an opportunity to come to the House every two years for a full debate. He would have an additional moment of glory explaining how all the schemes work. I submit that that would do his career no harm and it would certainly help the Government, because they would be seen to be explaining exactly what they were trying to achieve. 
 Where the Liberal Democrats come into this, I do not know, because they have not bothered to turn up to this Committee. Having made a great song and dance about how important the Bill was, how strongly they felt about the different schemes, and how they would table amendments in Committee and make this issue one of the top items on their agenda for spring, they have not turned up. That damp squib is a bit of a disappointment, because I would have liked to hear what the Liberal Democrat spokesman had to say. 
 Let us consider some of the schemes that the Minister explained in his letter—I am grateful that he did so. In annexe A, he flagged up the key schemes under section 8: the early growth funding programme; the regional venture capital funds; the UK high technology fund; the support for community development finance institutions; the bridges fund, or community development venture fund; the enterprise grant scheme; the business incubation fund; the UK coal operating aid scheme; the urban post office network reinvention programme; the new iron and steel employees re-adaptation benefit scheme, or new ISERBS; redundancy payments for UK Coal's Selby complex and Longannet; and the Rover taskforce. 
 Annexe B gave a great deal of information about the small firms loan guarantee scheme. That was spelled out clearly and in such a manner that we saw exactly how the scheme has been working and what excellent value for money it has been providing. There was confusion about the cost of the scheme and a 
 number of hon. Members asked about that on Second Reading; the Minister said that he would let us know the exact cost. I think that the scheme has given very good value for money. Up to 31 January 2003, £3.24 billion had been paid out under the scheme for a total of 82,265 loans, which is a very large number. The total cost to Her Majesty's Government up to January was £468 million. That is quite a small price to pay in the context of that large figure covering a long time—roughly 22 years. 
 We need to debate several of those schemes. I took careful note of what was said on Second Reading by my hon. Friends the Members for Cities of London and Westminster (Mr. Field) and for Sevenoaks. They pointed out that the venture capital markets in this country are now much more sophisticated. The City has suffered substantial pressure since the downturn of the stock market, and pension funds are under a lot of pressure. Many investment banks are suffering because of a shortage of deal flow, and there are very few initial public offerings. However, the venture capital funds have substantial amounts of money to invest and, as I said, the market is now very sophisticated. The small firms loan guarantee scheme plugs a gap, especially for businesses that require finance of anywhere between £10,000 and £750,000 or so. 
 I question whether the Government need to be quite so involved in venture capital. The early growth funding programme was set up to stimulate small amounts of risk capital for start-ups and growing businesses. I notice that the first fund was the London seed capital fund, which was launched on 5 December 2002 with £2.65 million investment provided directly from the Small Business Service in the Minister's Department. I question whether that investment is needed in London, because London already has a sophisticated venture capital market. Should the Government be trying to second guess what industry needs by way of venture capital? 
 In July 2001, the first investments were made in the UK high technology fund. I understand that that is a 12-year fund, with a possible three-year extension. To date, £106 million has been raised from private-sector investors, alongside £20 million of Government cornerstone investment. Can the Minister clarify whether that £20 million was mission critical in securing the £106 million, or would that amount have flowed in anyway? 
 Some £124 million has been committed to nine specialist UK-based venture capital funds, which means that the Government is now quite aggressively involved in the VC market. As I said earlier, the VC market is awash with cash, so I doubt that the Government should be involved in that area. 
 During the debate on Second Reading, the Minister told me off for probing him on the community development finance institutions. He explained to me that those institutions were doing a huge amount of good work in deprived communities throughout the UK. I would like to take him up on his offer of visiting some of those schemes. However, the amount of money being spent by the community development finance institutions and the community development 
 venture fund is small in comparison with the amount being spent on the venture capital funds. 
 There is a crucial need for proper accountability, because a lot of money is being spent. The Opposition require convincing by the Government that the areas in which it is being spent are appropriate. 
 Some of the other schemes are industry-specific and were set up to deal with particular problems. Examples include the UK coal operating aid scheme, which we debated in Committee a while ago, and the urban post office reinvention programme, which is a large scheme, involving more than £180 million. There was a debate on Second Reading about whether that scheme should have been introduced and implemented, because it is compensating postmasters for the move to automated credit transfer. That industry-specific scheme was introduced at a particular time and the Minister had to come to the House to debate it and explain why it was needed. However, in the ordinary course of events, when small amounts of money are being trickled into the different schemes, there will be no accountability for six years, which is a long time. 
 I ask the Minister to consider seriously a neat solution to the problem. On Second Reading, we discussed accountability and how often the Government would come to the House. As the Bill stands, that will depend on how quickly they spend the money, but I believe that inserting a commencement clause would solve a problem and make life easier. It would also make life more comfortable for the Minister after Report and Third Reading, because he will know that in two years' time there will be a full debate on exactly how the money has been spent. The annual reports that will be published later this year and next year would reinforce that, and the debate on the commencement clause could coincide with the annual report that will be published in two years' time.

Mark Field: I support the comments of my hon. Friend the Member for North-West Norfolk on accountability. In new clause 4 and amendment No. 3, we have proposed a pragmatic way of ensuring that there will be greater accountability. As my hon. Friend skilfully outlined, one of the difficulties is that too many small packets of finance go into different things. Various organisations, such as the Small Business Service and regional bodies, qualify for parts of the funding, although I am not suggesting that they do not do good work.
 Before I came to this place, I was on a local authority and a director of the Portobello business trust, which is based in a relatively affluent part of London. However, in any part of London, affluence and poverty can be merely a stone's throw apart. In my work as a director, I oversaw some of the expenditure and I heard anecdotal evidence about small businesses being encouraged. It was especially encouraging to see young entrepreneurs from all sections of society—ethnic minorities, in particular—using their focus to ensure that they could produce leaflets and put business plans into place. As my hon. Friend rightly pointed out, it is difficult for such businesses, however sophisticated a venture capital market they are in, to qualify for anything other than 
 general bank loans or such assistance as is given through small seed capital arrangements. 
 The real problem, however, is that it is difficult to go beyond the anecdotal evidence and quantify the belief that things are getting better and that good is being done. At one level, I appreciate that it would be difficult to quantify whether good is being done, other than over quite an extensive period, because of the relatively small packets that go into each area. Some community benefits also result from the moneys that are passed on through the schemes, and such benefits are over and above the absolute economic benefits that are achieved. 
 Ministers are the guardians of the public purse, and we are here to hold them to account. A study should be made about what benefits come from those small packets of money. One might understandably say that we should not expect every project necessarily to be a success. Indeed, venture capitalists say that, of the half a dozen businesses in which one invests, one will be a big success, one will trundle along and the other four will go out of business in a couple of years. We should therefore not have unrealistic expectations about ensuring accountability. It would be wrong to assume that the Government or the House should back only winners, or that backing losers is a sign of failure. Using such criteria would be quite wrong. However, it is sensible to have a framework within which we can assess the benefits of the schemes in which there is investment over a longer period. The sums of public money at stake are not insubstantial. 
 I agree with the commencement and sunset provisions in new clause 4. It would be sensible to have the opportunity to debate more frequently such matters on the Floor of the House. Such debate would obviously not be in the narrow confines of the Bill, but in the context of financial assistance, which will inevitably become more important. There is devolved Government in parts of the United Kingdom already, and I remind the hon. Member for Central Fife (Mr. MacDougall) that it is found in London as well as in Scotland and in Wales. Similarly, there might well be devolved Government in other parts of England in the next few years. Financial assistance will be an important subject, and the provisions in the Bill will give us the handle with which to debate the matter in the House. Even if the Minister does not accept the amendment, I hope that he will give serious consideration to the Opposition's concerns, as we try to hold the Department to account for the moneys that are spent.

Alan Johnson: I hope that the hon. Member for North-West Norfolk will decide to withdraw the amendment when he has heard what I have to say. If he does not withdraw it, I hope that the Committee will reject it. I was almost persuaded by the attractive proposition of having more parliamentary debates to deal with this issue until I looked at the record. He argued that the time spent debating the orders had increased. That is not true. In February 1996, before he went off to run his Cuban wine bar, the then Minister, Mr. Oppenheim, spent 14 minutes on the
 matter. That was the first time in 14 years that Parliament had debated the 1982 Act and the provisions of the various schemes.
 Actually, Mr. Oppenheim said then that he expected to return to the issue in mid-1998, but this Government did not seek a further tranche of money until April 2000. Then, the debate lasted for 18 minutes. In January 2002, when I was first involved and waffled on as usual, the debate went on for an incredible 55 minutes. However, the hon. Gentleman will remember that, two weeks ago, we spent 27 minutes discussing a new tranche of money for all the schemes that have been mentioned. Some very good points have been raised, and I shall address them. We spent more time on the issue between 1996 and 2002, but we are now going in the other direction. By the time another Minister takes over and waffles less than I do, we shall probably be back down to the original 14 minutes. There has been no evidence under previous Governments or the current one that it is necessary for Parliament to have continual debate on the issue, so I do not accept the hon. Gentleman's argument. 
 So far as amendment No. 3 is concerned, an annual report is already required by section 15(1) of the 1982 Act. As I explained before, the legislation says that the report must be published within three months of the end of the financial year, so there is the constraint that it must appear after April of each year.

Henry Bellingham: That section says that the Secretary of State
''shall lay the report before Parliament not later than six months after the end of the financial year to which it relates''.
 Is that not a long time?

Alan Johnson: It is. However, we are not amending that part of the Act. We shall certainly try to get the report out as soon as possible—the hon. Gentleman mentioned June—and to improve it in many ways. However, the amendment seeks another report, so we would be obliged to produce two annual reports. We have one that covers the uses made of section 8, so the requirement for an additional annual report to be laid before Parliament would lead to duplication.
 It is self-evident that all the new uses of section 8 powers have to meet the criteria set out in section 8(1) and the purposes set out in section 7(2), which include modernisation, reconstruction, orderly contraction and promoting efficiency. Some of those purposes might have come from the Conservative party. The Secretary of State is required to form an opinion in relation to the criteria and to undertake such an exercise in each case. Assistance cannot be provided if all three criteria are not met, and the exercise is already subject to scrutiny in Parliament and elsewhere—for example, by the tabling of parliamentary questions, and through the ombudsman and the National Audit Office—to ensure that there are no inappropriate uses. Externally, decision making can be challenged in the courts by way of judicial review. Section 8(8) already provides Parliament with the opportunity to scrutinise the larger uses of section 8, exceeding £10 million. 
 In the letter that I circulated to all members of the Committee and to the Committee that met two weeks ago, I confirmed that—in response to a point that was raised by the hon. Member for North-West Norfolk and others on Second Reading—I have asked officials to include more detail in the annual reports of the schemes. 
 I urge the Committee to reject new clauses 2 and 3. Subsection (a) of new clause 3 repeats the wording of new clause 2. Individual financial assistance schemes have been evaluated in the past and the evaluations have been published. The most recent was the evaluation of the small firms loan guarantee scheme—a very comprehensive review by KPMG—published in 1999. As I explained in my letter of 10 March to Committee members, apart from the loan guarantee scheme, the seven other Small Business Service schemes that currently use the section 8 powers are new schemes and it is too early to evaluate them. 
 I heard what the hon. Gentleman said about regional venture capital funds. We have only just put the last one in place. They are operated through the regional development agencies, so it is far too early to have a proper evaluation. As regards the future, I explained in my letter that the DTI's business support was undergoing a total overhaul. In future, business support will be directed to those areas where it can be seen to drive up productivity, increase prosperity and where there is clear evidence of market imperfection. 
 In a sense, I agree with what the hon. Members for Cities of London and Westminster and for North-West Norfolk said. We need to ensure that the schemes are robust. We will ensure that not just for the 13 of the 15 schemes that are relevant—the two schemes on coal support are not particularly relevant to this category—but for the 130-odd business support schemes that we provide through the DTI. It will therefore be a comprehensive overhaul. 
 All the Department's new business support products, including the measures that use section 8 as their legislative base, will be subject to ongoing monitoring and analysis to measure whether they have achieved their objectives and offered value for money. We intend for information on the efficacy of all the DTI's business support products, including the measures under discussion, to be available in the public domain in future and, as I have already undertaken, we shall refer to the conclusions of evaluations published during the reporting year in the annual report for that year. I hope that deals with many of the points raised in the debate. 
 On subsection (b) of new clause 3, as I have said, all the DTI's business support activities are going through an overhaul. Alongside more consistent branding and customer-facing technology, the overhaul will provide customers with a clearer picture of the business support on offer from the DTI. We need the new limits in place to ensure that there is a legislative base for the existing section 8 schemes until replacement products have been introduced. Without the increase in the limit, the legislative base would be exceeded when the limit of £2.7 billion is reached, which we forecast to be towards the end of this year or at the beginning of next year. 
 As far as new clause 4 is concerned, a cumulative limit was originally introduced as a control on the use of section 8. The draft Bill continues to allow oversight on such a basis. The new clause, which would introduce a time-limited provision, would not improve on that control. Indeed, if it is intended to sit alongside section 8, it would make the legislation unworkable. In my view, Parliament should be more interested in the spend under section 8 rather than in the passage of time. 
 In addition, the requirements for a commencement order and for resolutions of both Houses would not be a good use of Ministers' or Parliament's valuable time. If we were to accept the new clause for such a commencement order, another debate on section 8 would be needed in less than a year's time after Royal Assent and before the current limit of £2.7 billion is reached. Further affirmative resolutions of both Houses would then be needed only two years later and, beyond that, new primary legislation would be needed four years after commencement. Again, that does not seem like a good use of Parliament's time. Previous experience goes back to 1972, never mind 1982, and there is no argument for suggesting that we need to use Parliament's time more frequently. The Bill, as currently structured, offers the best basis for providing continued support for industry as well as accountability to Parliament. I ask the Committee to reject the amendment and new clauses.

Henry Bellingham: I am grateful to the Minister for his explanation and for his strong views on the subject. There are several points that I would like to run past him. I understand what he says about the commencement order and how it would lock Ministers into a much more rigid framework. I know why he is not happy about that. However, the fact remains that it will be six years before we have the debate on the first tranche. That is a problem to which we will have to come back on Report or possibly in another place. I will not press new clause 4 to a Division, because I recognise that I am unlikely to win a vote in Committee. There is no point in being wiped out when it is not necessary. However, we have made some important points about the desirability of the House being able to call Ministers to account.
 The Minister rightly pointed out that a great deal of work goes into the annual report and that he intends to put steps in place to improve it. I endorse that. What would happen if he suggested to the Leader of the House and to the Government Chief Whip that, from time to time, it might make sense—particularly if we were not under too much pressure in the summer—to have a debate on the annual report? After all, there are plenty of quiet Thursdays when we have debates for which, to be honest, the Opposition have trouble in finding Members to speak. Having a debate every now and then on the annual report—perhaps an annual debate on the annual report—would give all hon. Members an opportunity to discuss the schemes in their constituencies. By definition, it would be a very wide-ranging debate. 
 The Minister will be aware that one of our problems on Second Reading resulted from the fact that the Deputy Speaker was strict about hon. Members 
 ranging too far from the subject of financial assistance. In fact, he called me up a couple of times because I was trying to consider aspects of the wider economy. We are debating a very narrow Bill, but there is no reason for the Speaker not to allow a debate on the annual report to be very wide-ranging. In fact, one could talk about any of the schemes, about the wider economy and about constituency interests. That would be a good precedent to set. I suggest to the Minister that he try it this year. Obviously, the momentous events in Iraq will dominate the House's agenda for some time, but, please God, the conflict will be over in a reasonably short period and this place will be able to return to its normal business. The summer would therefore be an ideal time to put in place my idea of having a debate on the annual report. Let us see how it goes. It may prove a disappointment; very few hon. Members may turn up. In that case, the DTI would be vindicated in concluding that it was a waste of time. However, we should try it first. 
 Perhaps the Minister could tell us something about the business support review, as it goes to the core of the points raised by my hon. Friend the Member for the Cities of London and Westminster about the plethora of schemes in the DTI. We have 15 schemes under section 8, many of which are run by the Small Business Service. The Secretary of State has commissioned the business support review to look at all the schemes in section 8. Presumably, it will not be looking at schemes such as the urban post office reinvention programme; nor will it be looking at the UK coal operating aid scheme. It will be looking at ongoing schemes so as to put in place a more focused framework of support measures for business and industry. 
 Will the Minister tell us how the review will interface with the schemes here? Will he also tell us when the Secretary of State's review is likely to be concluded? When it is concluded, will there be a statement to the House? Will there be a written statement? How will the DTI handle the announcement of this very important review? Many constituencies are affected by the schemes, which go to the root of what we are discussing today. In some ways, it might be considered slightly premature that we are discussing the new ceiling and the tranches when we are, to some extent, flying blind. The review may conclude that there is no need for some of the schemes and that we need a more streamlined operation, or perhaps that some schemes under section 8 need to be amalgamated or combined. The Minister said that some—particularly those involving venture capital or the regional venture capital funds—were in their infancy, and that he could not tell us how they were working, because it was too early for a proper evaluation. I do not want to second guess the review, but how would he handle any suggestion of far-reaching changes to schemes under section 8? 
 I should like the Minister to pay serious attention to the possibility of experimenting this year. We could, if business is light in July, have a debate on the annual report. That would give hon. Members an opportunity 
 to decide whether they wanted to make use of the occasion to put across important constituency points.

Alan Johnson: If a debate on the annual report is a good idea, I suggest that the hon. Gentleman should go through the usual channels and use an Opposition day to debate it. The time that we have spent debating such issues in the past does not suggest to me that there is a case for his proposal. However, I remember relevant debates on previous schemes. For example, there was a debate on the ISERBS scheme for steel workers, which was raised by a Back Bencher. In November we discussed the urban post office network reinvention because it involved a sum of more than £10 million. We debated assistance to Selby when the closure of the mine was announced. We also had a debate on Atlantic Telecom, when we provided assistance in Scotland after customers were left with the prospect of no telecoms services. Probably few schemes have not been the subject of a parliamentary debate, either on a Government statement or initiated by Back Benchers.
 I do not accept the hon. Gentleman's argument. We can improve the annual report and it is up to hon. Members to use the channels that are open to them to raise issues in debate. It is up to the Opposition to use one of their supply days for a debate on the annual report. I am reminded that we have regular regional affairs debates, which do not attract too many Opposition Members. Indeed, I believe that the Opposition are still committed to abolishing regional development agencies and the Small Business Service, although their position may have changed.

Henry Bellingham: I would like to make it clear that we are not committed to abolishing the Small Business Service, although we were at the last general election. We are reviewing many aspects of Department of Trade and Industry policy and we have not made, and almost certainly will not make, that commitment.

Alan Johnson: We could move on to consider regional development agencies, as it sounds as if they will get the chop in the unlikely event of the hon. Gentleman's party forming a Government.
 Debates on regional affairs are an important way in which hon. Members can raise questions about schemes. Often they raise issues about regional selective assistance, which is subject to section 7 and not a matter for this debate on section 8. 
 I cannot say what the exact plans are in relation to business support activities until we are ready to unveil them, although I am sure that there will be parliamentary activity in that connection. The key objective, however, is to have fewer, bigger schemes. There was a plethora of support schemes in the 1980s and 1990s and, as the hon. Member for Sevenoaks said, these things grow like Topsy. Many of them relate to problems that occurred in the past, not to issues or industries that are relevant today. Never mind the small business person, any Member of Parliament who wants to access business support finds that it is extremely complicated to do so. I find it extremely complicated despite the fact that I have ministerial responsibility. 
 The aim is to cut through the complexity and to introduce bigger programmes, which are more focused and more effective for the business community. As I explained on Second Reading, the idea is to go for a year zero, so that all schemes will cease and the new programmes will commence. As part of the project, we are about to launch the small firms loan guarantee scheme, as I am sure the hon. Gentleman will be pleased to know. He is a great fan of that scheme, as am I. However, we shall also be considering the relevance of the other support schemes under section 8. Some 14 such schemes have been introduced since 1997. I am sure that many of them will survive the change, although they might be rebranded and made easier to access, because the general thrust of the schemes is important. 
 I cannot give any more detail than that. The hon. Member for North-West Norfolk is right to say that this is an important overhaul. We in the DTI see it in 
 that way. If, in a year's time, business people are still saying that the process of accessing business support is very confusing, we shall have failed. I very much hope that the project will be supported and will be successful. I hope that the Committee will reject the amendments and the new clauses.

Henry Bellingham: I shall certainly not press the amendment and the new clauses, to which we may return at a later stage. I am grateful to the Minister for thoroughly explaining his case with good humour and sensitivity. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 1 ordered to stand part of the Bill. 
 Clause 2 ordered to stand part of the Bill. 
 Bill to be reported, without amendment. 
 Committee rose at nine minutes to Ten o'clock.